£480k deposit saved by bridging loan

United Trust Bank has saved a customer’s deposit on a ground-floor apartment in central London with a loan of around £2m at 65% LTV.

The customer has exchanged contracts to purchase the off-plan apartment with the intention of letting it out and had paid a substantial deposit upon exchange.

However, as market conditions softened, the client decided she no longer wanted to complete and instead chose to assign the contract to a new purchaser.

The problem came when the assignee dropped out of the deal very late in the day leaving the client at risk of losing her £480,000 deposit.

An extension was agreed, but there was still an imminent completion date, which led to her mortgage broker turning to UTB.

UTB found that the deposit and additional funds to purchase the property were coming from the customer’s father who lived overseas and it was agreed to add him to the loan.

The father was unable to come to the UK in the short time available, which meant UTB worked with its solicitors to find an international law firm that could assist the Know Your Customer requirements and provide the father with the legal advice to allow the loan to complete on time.

“This scenario is not unusual for central London, where the attraction of residential property to overseas purchasers is very well noted,” explained Alan Margolis, Director of Legal Mortgages and Bridging at UTB.

“However, as ever, behind the headlines lie individual stories, and often they involve families.

“Such was the case with this loan, and it was pleasing to be able to assist and save our customers a substantial deposit.”